December 15, 2003	Monday	Shawwal 20, 1424

Stocks maintained an optimistic outlook during the last week as despite a mid-week snap reaction, the KSE 100-share index managed to stay above the crucial level of 4,300 points.

Most of the pivotals participated in the run-up taking cue from the privatization reports relating to the PSO and terribly hectic two-way massive activities in the OGDC, which will soon assume the role of a trend-setters along with PSO, PTCL and Hub-Power.

All are now eyeing the index level beyond 5,000 after the addition of OGDC in the existing 100-share index as weightage could push it above this level early next year. The price flare-up associated with this feat in the leading base shares and other pivotals could well ensure smart capital gains, which analysts said, “could be the new year gift for the investors.”

However, the market witnessed a brief interruption in its sustained run-up all through the week after the reports of linkage of the proposed constitutional package on LFO with the vote of trust for the president by the ruling elite and MMA refusal to oblige.

The KSE 100-share index despite late week pruning managed to finish with an extended gain of over 105 points and well over the crucial level of 4,305 points after, at one stage, falling below it and added about Rs10bn to the market capital at Rs915bn.

The market has been in an upbeat mood for last couple of weeks on the optimism that settlement of the lingering issue could boost investor morale but its linkage to the confidence vote has added new dimensions to the issue, analysts said.

“MMA may or may not accept the new condition, it will certainly opt for its pre-planned protest plan, which analysts fears, could cause a lot of political turmoil, bad for the share business.”

Indications are that the sudden death of the chairman of the MMA, Maulana Shah Ahmed Noorani may delay a bit its protest plan proposed to start from Dec 18, if the agreed constitutional package was not presented in the parliament but it may not be abandoned.

Market has more than basic fundamentals on which it could stay safe but if the MMA anti-government drive was joined by the other leading opposition parties there could be some serious problems for the ruling party.

In an uncertain political situations stocks tend to lose ground as investors try to shed an extra load to meet any negative fall-out of the political battles.

The late profit-selling in part was also attributed to unloading in shares outside the new list of 30 speculative issues in which forward trading will be allowed from Dec 15, under the new exposure rules billed as a bit tough by the analysts.

Earlier, the sentiment was also influenced positively by official signals about the possible settlement of the LFO issue within the current month. But leading investors were in two minds about the settlement of the issue because for the last several months positive news were aired but without any tangible result.

After having steadily risen to Rs56.20, being its career-best level so far, OGDC came in for active alternate bouts of buying and selling later. But at the weekend session it staged a smart rally and rose by Rs3.75 at Rs53.85.

Other prominent gainers were led by Ghandhara Diesel, Shahtaj Sugar, Shell Pakistan, PSO, Clariant Pakistan and Nestle MilkPak, up Rs3 to Rs15, the largest rise being in the last two.

Wyeth Pakistan, which had risen sharply higher during the last couple of sessions came in for stray selling and fell by Rs25 followed by Glaxo-SKF, Dawood Cotton, Pak-Suzuki Motors, International Industries, Clover Pakistan and Bhanero Textiles,off by Rs3 to Rs8.10

The market seemed to have received a major boost from strong rumours,leaking apparently from the official sources about the final bidding date for the sell-off of controlling shares of Pakistan State Oil (PSO) to one of the three short-listed bidders possibly on Jan 6.

“What gave credence to the rumours was the fixation of reserve price at $8.4 or Rs481 per share of Rs10,” analysts said. “PSO 10-rupee share has been fluctuating between Rs260 and Rs300 for the last several months in anticipation of long-awaited final bidding date.”

The government has already given a Rs8 billion mark-up waiver to the PSO on loans it owes to oil refineries and picked up receivable worth Rs7.5 billion, which Wapda and the KESC owe to it, one of the major irritants and demands of the short-listed bidders.

“The final bidding may not be fixed on Jan 6, or gets a bit late but it is now pretty clear that the Privatization Commission has cleared the way for a smooth transaction of massive deal possibly during the first month of the new year,” they said.

Floor brokers said some of the leading investors although appear to be skeptical about the widely speculated settlement of the LFO issue made fresh covering purchases on selected counters.

The perception that the current run-up could get an added impetus during coming sessions after a massive amount of Rs22 billion tied to the issue of the OGDC again finds its way into the share business kept investor in an upbeat mood, they added.

FORWARD COUNTER: Hectic trading was witnessed on this counter as investors played on both sides of the fence amid alternate bouts of buying and selling. The bulk of the activity remained confined to the OGDC, which alone accounted for about 80 per cent of the total volume.

Barring FF Bin Qasim, which fell modestly followed by reports of 2.66 per cent right issue, all other shares managed to finish higher under the lead of the PSO, Hub-Power, PTCL, Engro Chemical, Fauji Fertilizer, MCB ICI Pakistan and some others amid active deals.—Muhammad Aslam